The U.S. Department of Housing and Urban Development (HUD) has issued Notice PIH 2012-32, REV-1, the first revision to the final implementing notice for the Rental Assistance Demonstration (RAD) program, which allows public housing and other HUD-supported properties to be converted to long-term, project-based Section 8 rental assistance as a tool for preservation.  Through this revised implementing notice, HUD made some important changes to the RAD program, including changes in eligibility and selection criteria.  A few key changes are:

• providing RAD contract rents at FY 2012 rent levels for all applications submitted prior to the end of calendar year 2013;
• the ability to "bundle" projects for conversion and thereby potentially set higher rent levels;
• permitting Moving to Work (MTW) agencies who are applying for two or more projects to use their MTW block grant flexibility in setting initial contract rents subject to PBV or PBRA rent caps;
• eliminating certain caps/restrictions on RAD conversions of mixed-finance and HOPE VI properties;
• permitting phasing of redevelopments in conjunction with RAD awards; and
• allowing for portfolio awards for sets of projects.

These changes should have the effect of making RAD a more attractive opportunity for a great number of housing authorities.  We will circulate a more detailed summary of the changes with a client alert later this week.